All Forum Posts by: Gregory Jacobs

Background:  I am a 31-year old New Yorker who is looking to purchase an investment property in/around New York City.  I recently purchased a fixer-upper apartment for $500k (20% down with a 2.65% for 10 years, then adjustable) and spent a substantial amount of my cash holdings on an ~$80k renovation.  The apartment is gorgeous and probably worth $700k - $750k.  I have $27k in debt (0% interest CC for another year), $30k in liquid investments, and about $55k in a 401k.  I make $165k/annually and I max out my 401k.  

Target: While I'd like to get rid of the outstanding debt as quickly as possible, I also want to set my sights on building wealth through an investment property in the Hudson Valley (or Poconos, etc.).  I'd rent the property out on Airbnb and potentially use it if/when the home isn't rented.  A respectable home ranges from $350k - $650k.  This will conservatively generate $6,500/month or roughly $3000/month in free cash flow.  

Question/Ask:  I am looking to take on an investor(s) to help finance the purchase and get things going.  I am fortunate enough to have a few family members who'd be willing to contribute to the deal, but I don't know how to structure it.    For simplicitiy's sake, let's say my uncle is willing to invest $100k to get things off the ground.  I will manage the property and invest $25k as well. 

How do I go about paying my uncle back/structure the deal so that he gets a fair return on his investment?

Hi all,

Long-time podcast listener, first-time blogger!  I recently purchased a fixer-upper (co-op) apartment in New York City.    It's about 600 sqft (large for NYC!) and the apartment cost $500k.  I put 20% on a 30-year mortgage.  The first 10-years are fixed at 2.65% and the remaining 20-years are variable.  I went with this mortgage type because I do not plan on living in the apartment for more than 5-7 years.  The all-in costs are $3,330.  My mortgage payment $1650/month and the monthly maintenance $1650 (*there is a $400/monthly assessment to make up for lost retail revenue).

I am 30-years old, single, and work at a fintech startup.  My take-home pay is $165k (+ $200k in stock options that vest over 4-years) plus a ~$20k annual bonus.  I contribute 6% to my 401k (with a 4% company match) and all medical/benefits are fully covered by my employer.  My net monthly take-home pay is ~$8k.  After expenses (mortgage, dog, gym, utilities), I net out $4,200/month.  

1. 
   Home Equity - $106k
2. Roth 401k - $55k
3. Liquid Stock - $45k
4. Overseas investments (not liquid) - $20k
5. Cash - $6k
6. Total: ~$232k (liquid $50k)

I am fortunate enough to have paid off my student loans and I have no credit card debt!

The kitchen in the apartment needs to be renovated (no working stove/oven/fridge/etc.).  All in, I am looking at $50-60k in total costs.  This investment will net $100k $130k in appreciation.  I've debated selling stock, taking out personal loans, or 0% interest credit cards to finance the project.  I can avoid added taxes/costs by paying cash for a lot of these projects as well.

Ultimately, my question is should I pay cash for the reno and avoid going into debt, or should I finance the project and pay it off over the next 1-3 years?

Thanks for your help!

Greg